S Korea cbank leaves bench­mark in­ter­est rate un­changed at 2.5pc

SEOUL: The Bank of Korea left bor­row­ing costs un­changed af­ter an ap­pre­ci­a­tion in the nation's cur­rency mod­er­ated eco­nomic growth.

Gover­nor Kim Choong Soo and the pol­icy board left the seven-day re­pur­chase rate at 2.5 per­cent, the cen­tral bank said in a state­ment in Seoul to­day. All 10 econ­o­mists in a sur­vey pre­dicted the de­ci­sion fol­low­ing quar­ter per­cent­age­point in­creases in July and Novem­ber from a record-low 2 per­cent. The bench­mark rate re­mains be­low Novem­ber's 3.3 per­cent pace of in­fla­tion af­ter to­day's unan­i­mous vote. Ex­pec­ta­tions for price gains are also climb­ing, ac­cord­ing to the nation's bond mar­ket, sig­nal­ing the bank may have to re­sume rate in­creases.

"I see no change in the BOK's stance to keep rais­ing bor­row­ing costs, which are still very low," said Park Sang Hyun, an econ­o­mist at HI In­vest­ment & Se­cu­ri­ties Co. in Seoul. In­fla­tion re­mains a con­cern, though the cen­tral bank will wait un­til Fe­bru­ary or March next year be­fore con­sid­er­ing an­other in­crease as the econ­omy is slow­ing, Park said. The won rose 0.8 per­cent to 1,137.40 per dol­lar as of 12:28 p.m. in Seoul, ac­cord­ing to data com­piled by Bloomberg.

The cur­rency has ap­pre­ci­ated about 35 per­cent since March last year, the most in Asia. The bench­mark Kospi stock in­dex gained 0.8 per­cent to 1,971.27. The yield on the 3 per­cent note due De­cem­ber 2013 rose 9 ba­sis points to 3.17 per­cent, ac­cord­ing to Korea Stock Ex­change. -PB News